Home / Knowledge / News / Textiles / Gains in cotton market
Gains in cotton market
09
Jun '08
Cotton prices had worked their way lower for nine consecutive sessions for a total loss of over 800 points before bottoming the early part of the week. Prices had just sagged under their own weight from speculative liquidation as well as option related hedging pressure from merchants. The pressure came despite exporter and mill fixation buying and belief that the market had reached a level a week earlier that had produced a volume of new export business.

Despite the sideways movement following Tuesdays lows, Traders had little confidence as to the next direction given the prospects of a 10 million bale carryover at the end of this season, record supplies for the upcoming July delivery period and what had appeared to be a fairly good start on the growing season.

However, on Friday, the market responded to ultra-strong outside markets and confirmation of hot damaging winds on tender young plants in West Texas, with a strong technical performance. A string of five consecutive 100 plus degree days with high winds cooked the emerging plants and left the top soil deficient of pre-plant moisture. With insurance cutoff dates and sky-high closts staring producers in the face, standing acres are greatly in doubt.

Fridays gains in cotton were the best in almost two months and turned what had looked like another losing week into a positive performance. For the week, July gained 78 points and December 58 points.

Gains in the cotton market were miniscule compared with many other markets. The CRB racked up nearly 2,000 points as it moved to all time record highs. The headlines focused on crude oil which gained $11 for the week but soybeans gained 85 to 94 cents, corn nearly 52 cents and wheat 44 to 49 cents depending upon the exchange. Other than weather influence, the other item of significance was the sharp drop in the US dollar.

From a technical standpoint, Friday's bounce was a near perfect 50 percent correction of the recent eight to nine day drop in prices that had reached the lowest level since August for the July contract and the middle of December for the Dec contract. However, the 20 day stochastics confirmed a buy signal Friday. A close for July cotton above 6720 portends near term upside targets of 6832 to 6843. A close for Dec above 7550 portends a near term upside target of 7712 to 7720.

The jury is still out concerning the significance of Fridays market events. Monday's action hopefully will give us a clue not only as to whether the fundamentals might be changing, but a signal as to index and hedge fund interest in the long side of the cotton market.

Must ReadView All

Textiles | On 20th Jan 2017

TEA expects budget to upscale textile skill industry

The Tiruppur Exporters’ Association (TEA) has requested the Central...

Textiles | On 20th Jan 2017

Bangladesh could earn $60 billion in exports by 2021

Bangladesh is expected to earn over $60 billion in exports by the...

Courtesy: PIB

Textiles | On 20th Jan 2017

Govt to help Tangaliya weavers purchase looms: Irani

Government of India will facilitate Tangaliya weavers in purchase of...

Interviews View All

Shawn Honeycutt
Bolger & O'Hearn

‘The Indian market is interesting and rather persistent in seeking new...

Pinkesh Jain
Everflow Petrofils Ltd

‘An innovative technology which India needs desperately is the...

DK Sharma
Velocity Apparelz

We constantly communicate with employees at all levels

Marten Alkhagen
Swerea IVF AB

Marten Alkhagen, Senior Scientist - Nonwoven and Technical Textiles of...

Kerem Durdag
Biovation II LLC

Kerem Durdag, CEO, Biovation II LLC, provides an insight into future...

Kai Poehler
Voith Paper GmbH & Co. KG

The glass mat industry is growing by five to eight per cent annually. Kai...

Pranav Mishra
Huemn

Designers Pranav Mishra and Shyma Shetty’s Huemn is known for its...

Tony Ward
Tony Ward

"You have to truly understand what your client wants, know her needs, what ...

Rupa Sood and Sharan Apparao
Nayaab

Nayaab, an exhibition meant to celebrate Indian weaves, is in its second...

Press Release

Press Release

Letter to Editor

Letter to Editor

RSS Feed

RSS Feed

Submit your press release on


editorial@fibre2fashion.com

Letter To Editor






(Max. 8000 char.)

Search Companies





SEARCH
January 2017

January 2017

Subscribe today and get the latest update on Textiles, Fashion, Apparel and so on.

SUBSCRIBE


Browse Our Archives

GO


eNEWS
Insights
Subscribe today and get the latest News update in your mail box.
Advanced Search